Ashes to Ashes (36 page)

Weissman was told to explore a market research apparatus for the company. Through friends he obtained invaluable access to Procter & Gamble’s marketing people in Cincinnati, who were in the vanguard of consumer testing of products and advertising and preached the virtues of intensified brand management over the traditional centralized approach. “The main lesson I learned from them,” Weissman recalled, “was that if you try ten new ideas and nine of them flop, you can still make it all back and a lot more on the tenth one. But if you stand still in product development, you’re going nowhere but down.” He then turned to the Elmo Roper polling firm, whose gifted Louis Harris worked out a detailed questionnaire with him and PM colleague Ross Millhiser. There followed probably the largest consumer study ever paid for by a cigarette maker—10,000 at-home, in-depth interviews with smokers on their preferences and phobias. “We were trying to find out the potential depth of the filter market,” said Weissman. What they found was that 61 percent of their subjects had tried a filter brand and abandoned it either because its smoke lacked taste or they felt it was effeminate to use such a safety-first product—or both.

Weissman told McComas that Philip Morris had to create a filter brand with a strong enough taste to overcome the prevailing notion that filters were for sissies, and then create a virile image for it. Named vice president with oversight of marketing, packaging, and new products, Weissman, who was still a newcomer and no trained tobaccoman, was given a license to range widely in assembling the pieces for the crucially needed product, with the final decision to be left to the top brass. Development of the new cigarette could not be left primarily to the blending and manufacturing people in Richmond, where they lacked technical expertise on filters and what they were supposed to remove from the smoke, not least because industrywide efforts to determine exactly what cigarette smoke was composed of were only just beginning in earnest. Thus, it was clear to Weissman that he would have to seek supplemental talent outside Philip Morris. The ensuing eighteen-month effort, launched in mid-1953, would involve eight consulting firms, six testing laboratories, and the Roper polling organization as well as twenty-five technicians in Richmond and nearly every executive at the company’s New York headquarters. Lyon and McComas told jittery stockholders that the company was working on a filter brand but, virtually acknowledging that the competitive situation was too precarious to risk a flop, added, “It may be wise to wait a while and see how the trend develops.” By “trend” they meant what Reynolds and American Tobacco were going to do.

Before a blend and a filter were developed for the new brand, two key elements in its presentation were settled upon—its name and the nature of the package. Among the possible names tested in the original Roper survey of 10,000 smokers, the old Marlboro brand had scored well. Still selling some 12.5 million packs a year as a premium brand, it was widely associated with quality merchandise, and the name had a masculine ring to it even though it had long been promoted as a mild, woman’s smoke. The name also had a British resonance that the industry seemed to find
de rigueur
for filter brands (and that would soon be reemphasized with the arrival of RJR’s Winston). To perform what amounted to a sex-change operation on the Marlboro and market it massively as a popularly priced filter with a pronounced flavor instead of one with an effete image might have seemed risky to outsiders. But starting late in the filter game, the ad hoc Philip Morris marketing team felt that Marlboro’s established name recognition was a valuable base to build on and worth sacrificing the quarter-billion units the old brand was selling yearly.

The new hairy-chested Marlboro, company hands agreed, had to offer a highly visible, toutable point of difference, beyond the abstract claim of full flavor, when it reached the market. Accordingly, fresh attention was paid to the discovery, made by production chief Clark Ames during a 1952 trip to Europe, of a cardboard cigarette package with a hinged lid. Fiddling with the foreign prototype, in a “twin bundle” configuration of two rows of ten cigarettes each, Ames saw how it could be readily adapted to the American standard pack of three rows consisting of seven, six, and seven cigarettes, respectively, and could be made to close tight with a snug little snap. No U.S. company had yet ordered the machinery to form the hinged-lid boxes from Molins, the world leader in cigarette-manufacturing equipment, and so the Philip Morris Marlboro team began weighing the virtues of Ames’s idea. There was a certain masculine quality to the hard-edged cardboard box when compared to the standard “soft” pack, a kind of protective firmness that would guard against the crushing or distorted shape that cigarettes often suffered in the flimsier paper-cup wrapping. The box also prevented tobacco from escaping into a smoker’s pocket or purse while making it easier to extract a cigarette because the hinged lid offered easy access by exposing the top of the package. The sharp edges made for a bulkier, less malleable shape, but the distinctiveness of the trim package outweighed such drawbacks in the minds of the PM team. Molins agreed to give the company exclusive U.S. rights to the machinery to make the box through mid-1956.

Now the focus of the Marlboro effort became the cigarette itself. McComas remained uneasy about the know-how of his Richmond people when it came to filters, with which they had no experience. Al Lyon’s report to him at about this time that Philip Morris could greatly strengthen its capability in the filter area, as well as pick up a profitable premium brand, by buying out Benson &
Hedges, fell on receptive ears. The Cullmans were well regarded; B&H had some talented younger managers, including Joe Third, who could only bolster Philip Morris if they agreed to come over as part of the buyout, and 10 percent of the Cullman-dominated Tobacco & Allied Stocks holding company portfolio was composed of PM stock. This last news invited pause on McComas’s part, for what if the Cullmans used their previous Philip Morris holdings and the stock they received in exchange for handing over Benson & Hedges as the basis for a campaign to seize control of PM? While the Cullmans were hardly known as predatory, the possibility could not be discounted altogether.

One solution, of course, would have been to buy B&H outright instead of merging the smaller outfit into the larger one. But McComas preferred the approximately 5 percent dilution of Philip Morris stock that the transaction cost him to the heavy cash payment of $22.4 million in PM stock that the Cullmans were asking. There was no haggling over the terms, as it was made clear to McComas that B&H was not about to be shopped around the industry to the highest bidder. The Cullmans knew and liked Philip Morris and its people; they had something of value to offer the larger company; and that was the price—take it or leave it.

McComas took it, paying a steep twenty-five times B&H’s current earnings to add the Parliament to his faltering stable of brands and, he hoped, useful personnel and key technological skills. To protect against any immediate possibility of a takeover bid by the Cullmans, their Philip Morris stock, now amounting to about 10 percent of the company’s total equity, was placed in a non-voting trust for three years, so that Wall Street would understand that the transaction was a friendly one, and Joe Junior and Joe Third joined the PM board of directors early in 1954 when the deal became official.

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IT
did not take the Philip Morris manufacturing people long to realize that the Benson & Hedges crowd could provide no real help with the development of the new Marlboro filter. The acquired company had actually been struggling with the inadequacies of its cotton-fiber Parliament filter and had lacked the financial resources to address the problem seriously. The real benefit of the B&H purchase, then, would be the managerial skill that came over to PM at a time it badly needed some. Joe Junior brought the sagacity of three generations in the tobacco trade; Joe Third brought vigor, broad knowledge, and persistence. And then there were Joe Third’s cousin, Hugh Cullman, nine years younger with a dogged conscientiousness that seemed surprising in one with such adept social skills; Clifford Goldsmith, a crack operations man who had run the B&H factory; and B&H treasurer John Cookman. All four of the
younger men would play central roles in the future of Philip Morris, especially Joe Third, who came in as the new senior marketing man.

The arrival of Reynolds’s Winston in the spring of 1954, with its stress on rich taste and studied omission of all references to any health advantages beyond the fact of its “finer” filter tip, drew Philip Morris’s attention to the need to hasten development of the new Marlboro. The Winston, everyone in Richmond and PM’s New York offices recognized, was a very good cigarette indeed and threatened to steal the thunder from the new PM filter entry. Thus, the key Philip Morris player now became its veteran chief blender, Wirt Hargrove Hatcher.

A cob-rough country boy whose land-rich, cash-poor family lived on a farm not far from Richmond, Wirt Hatcher had come to town to attend business school and in 1914 joined the old Whelan-dominated Tobacco Products Corporation, with production facilities in Richmond. Born with a love for the land and everything on it, Wirt became the company’s leaf specialist and in time its chief blender, cooking up the formula for the old Marlboro after Tobacco Products took over Philip Morris, and later putting together the English Blend, as the Philip Morris brand was called in-house. Now a gimpy old-timer with a soft drawl, ripe language, a crusty on-the-job manner, and, it was said, four cents of the first nickel he ever earned, Hatcher had to come up with a blend superior to the bland Kent, the lackluster Viceroy, and what the PM factory people perceived as the “off” taste of the L&M, which they believed was suffering from Liggett’s rumored purchase of cheaper leaf for the brand—on the apparent premise that since the filter dimmed the taste of top grades, their proportion could be cut back. To create a blend as pleasing as Winston’s with its vaguely wine-and-raisin taste, Hatcher had to depart from the lightly flavored but aromatic English Blend, with its preponderance of Bright leaf, and make more use of Burley, the new reconstituted leaf, and their absorptive capacity for licorice, honey, and chocolate. The resulting blend was so delicious to Hatcher that he walked around the factory chewing a jawful of the granulated stuff. “We were the test panel,” recalled factory engineer Joseph Lloyd, part of the most discerning group of tobacco people in the place, who gathered after work each evening between five and seven o’clock to try the various batches of the new Marlboro blend Hatcher was concocting. “The Winston was a formidable target, but that was the one we knew we were aiming at.”

Hatcher’s handiwork then had to be yoked to the cellulose acetate filter designed for Philip Morris by the American Enka company and packed loosely enough for the full flavor and bouquet of the master’s blend to penetrate the barrier. What would be the point if the filter did its job too well? In order to “maximize taste,” as Weissman would later describe the basic engineering solution to the product’s design, “you had to compensate at the other end,” with
the result that the tar and nicotine yield of the initial version of the Marlboro was only slightly less than for the unfiltered Philip Morris brand.

The final essential ingredient, the package design of the hinged-lid box, while the work of many hands, was perhaps most zealously overseen by Ross Millhiser, the young native Richmonder named brand manager of the new cigarette. Rarely alluding to his Yale degree or wartime heroics as a foot soldier who escaped from his Nazi captors, the expansively voluble Millhiser was less reluctant to remind listeners that he had begun at Philip Morris before the war with an oil can in his hand and instructions to keep a row of cigarette-making machines operating throughout his shift. He was, from the first, a passionate and demanding judge of the reincarnated Marlboro and would ride with it to prominence.

Assigned at the time to coordinate the company’s advertising efforts, Millhiser worked closely with the packaging design firm of Frank Gianninoto & Associates, located in the Graybar Building on Forty-second Street around the corner from PM’s offices, to create a distinctive look for the new Marlboro pack. Their one guideline came from Louis Cheskin’s Color Research Institute in Chicago, which had urged prominent use of red on the package to signify a product with a strong flavor; Millhiser, who had always liked the warm look and quality image of the Campbell’s Soup can label, concurred. Gianninoto’s artists offered Millhiser several designs for the Marlboro, but one stood out in his judgment. The bottom half of the box had a white background, but just above the midpoint the white portion began tapering until it formed a right-angle point that thus created an overall white shape resembling a traditional house as a child might render it; the “roof” portion, comprising most of the top and lid, was in bright red. This simple but striking geometric design served as backdrop for the brand name, rendered entirely in slender and rather elegant lowercase letters in a serif-style typeface: even the initial “M” in Marlboro was done in lowercase to lend the whole a more casual and stylized look. The ascending portions of the two middle letters—the “l” and the spine of the “b”—were given an exaggerated height, and behind them rose a drawing of a cigarette, surging perpendicularly toward the apex of the “house” portion of the design. For visual interest the red “roof” portion had thin white chevrons added to it, achieving a kind of candy-stripe look.

Every element of the design underwent intense in-house scrutiny. The only major modification made at that point, though, was the removal of the maypole-like cigarette drawing; it seemed too blatantly phallic. But what would replace it in the white “second-story” portion of the house design? Consumer polls showed a favorable reaction to the Philip Morris “crest,” the ersatz likeness of the royal British coat of arms that had lent pedigree, albeit illegitimate, to the original Marlboro and English Blend packs, and so a cruder, miniaturized version in gold was now proposed for the space above the brand name on
the new Marlboro pack—to signify continuity, class, and a hint of elegance lacking in the dirt-plain Winston design. But brand manager Millhiser objected fiercely. “I was for our purposely dodging the elegance,” he recalled, but though outvoted on the inclusion of the crest, Millhiser was so strongly against embossing it in gold—the company had too long “catered to the tastes of the effete East and West coasts,” he felt, and ignored the more primal appeal to the heartland—that he persuaded the company to print the crest in a dark grayed blue. As if to surpass the Pall Mall crest with its pair of nonsensically pretentious Latin mottoes, the Marlboro crest bore the same Caesarian boast that had adorned the Philip Morris brand—
“Veni, vidi, vici”
—perhaps to convey company hopes for the product.